The response of iron doped lithium niobate under conditions corresponding to hologram storage and retrieval is described, and the material's characteristics are discussed. The optical sensitivity can be improved by heavy chemical reduction of lightly doped crystals such that most of the iron is in the divalent state, the remaining part being trivalent. The best reduction process found to be reproducible so far is the anneal of the doped crystal in the presence of a salt such as lithium carbonate. It is shown by analysis and simulation that a page-oriented read-write holographic memory with 1,000 bits per page would have a cycle time of about 60 ms and a signal-to-noise ratio of 27 db. This cycle time, although still too long for a practical system, represents an improvement of two orders of magnitude over that of previous laboratory prototypes using different storage media.